Taxing multi-nationals under union wage bargaining

This paper investigates corporate taxation under separate accounting (SA) and formula apportionment (FA) in a model with union wage bargaining and multi-national firms. Under SA, we find that increases in the corporate tax rate raise the wage level of domestic workers, while they lower the remuneration of foreign workers. The main insight emerging from a tax competition game is that the endogenous wage level gives rise to an ambiguous fiscal externality, which may dampen the race-to-the-bottom in corporate tax rates. A switch to a tax system with FA principles reverses the impact of corporate taxes on negotiated wages. While increases in the corporate tax rate reduce domestic wages, they raise the wage level of foreign workers. In a tax competition game, the endogenous wage level gives rise to a positive fiscal externality that enforces the race-to-the-bottom in corporate tax rates.     

Agglomeration and social return to R&D: Evidence from French plant productivity changes

This paper investigates the effect of inter-firm and intra-firm spillovers on the productivity of firms, using French data. The Luenberger Productivity Indicator (LPI) is used to estimate the productivity and to break it down into several components (e.g. efficiency, biased technical progress, scales effects, etc.). Using this approach, negative productivity changes are found due to the unfavourable economic situation over 2000-2002. Diverse forms of intra- and inter-firm externalities are then investigated through a Maximum Likelihood Random Effect (MLRE) model. Spillover effects due to spatial agglomeration - influencing Total Factor Productivity (TFP) and its correspondent components, technological and efficiency changes, are found.     

The Euro Area in Between Crises? Considerations on Fiscal Policies and Rules

Intereconomics - Credibility of the revised fiscal rules will be crucial so that vulnerable countries can benefit from confidence effects. National ownership will be key in that respect and can be...     

Assessing the Risk Potential of Premium Payment Options in Participating Life Insurance Contracts

Most life insurance contracts embed the right to stop premium payments during the term of the contract (paid-up option). Thereby, the contract is not terminated but continues with reduced benefits and often provides the right to resume premium payments later, thus increasing the previously reduced benefits (resumption option). In our analysis, we start with a basic contract with two standard options, namely, an interest rate guarantee and annual surplus participation. Next, in addition to the features of the basic contract, a paid-up and resumption option is included in the framework. The valuation process is not based on assumptions about a particular policyholders' exercise strategy but instead assesses the risk potential from the insurer's viewpoint by providing an upper bound for any possible exercise behavior. This approach provides important information to the insurer about the potential hazard of offering the paid-up and resumption option. Further, the approach allows an analysis of the impact of guaranteed interest rate, annual surplus participation, and investment volatility on the values of the premium payment options.     

Combining fair pricing and capital requirements for non-life insurance companies

The aim of this article is to identify fair equity-premium combinations for non-life insurers that satisfy solvency capital requirements imposed by regulatory authorities. In particular, we compare target capital derived using the value at risk concept as planned for Solvency II in the European Union with the tail value at risk concept as required by the Swiss Solvency Test. The model framework uses Merton’s jump-diffusion process for the market value of liabilities and a geometric Brownian motion for the asset process; fair valuation is conducted using option pricing theory. We show that even if regulatory requirements are satisfied under different risk measures and parameterizations, the associated costs of insolvency – measured with the insurer’s default put option value – can differ substantially.     

医院利用DMAIC和QFD减少用药差错

一家伊利诺依州医院在开展一个减少用药差错项目中既减少了工作量，同时又改进了90％过程绩效。 由一个黑带帮助的多学科团队实施六西格玛中DMAIC（定义、测量、分析、改进和控制）方法论 这个项目团队利用QFD（质量功能展开）来设计和开发过程职能 要想通过减少过程步骤来改进质量听起来是矛盾的。而在伊利诺依州的一个拥有200以上床位全功能医院在2005年实现减少用药差错的目标时却没有出现上述情况。事实上，医疗组织认可委联合员会（JCAHO）对奥尔顿纪念医院在该项目上实现过程绩效超过90％的改进予以了认可。     

Performance and Risks of Open‐End Life Settlement Funds

In this article, we comprehensively analyze open‐end funds dedicated to investing in U.S. senior life settlements. We begin by explaining their business model and the roles of institutions involved in the transactions of such funds. Next, we conduct the first empirical analysis of life settlement fund return distributions as well as a performance measurement, including a comparison to other asset classes. Since the funds contained in our data set cover a large fraction of this relatively young segment of the capital markets, representative conclusions can be derived. Even though the empirical results suggest that life settlement funds offer attractive returns paired with low volatility and are virtually uncorrelated with other asset classes, we find latent risk factors such as liquidity, longevity, and valuation risks. Since these risks did generally not materialize in the past and are hence largely not reflected by the historical data, they cannot be captured by classical performance measures. Thus, caution is advised in order not to overestimate the performance of this asset class.     

Response measurement and optimization of direct mailings

Beginning with 1995, we discuss different studies that deal with response measurement and optimization of direct mailings. Most of these studies analyze data sets from mail order companies or charities. We classify various dependent and predictor variables and??w.r.t. the latter distinguish static and dynamic effects. Response models are divided into parametric and flexible models. Besides, we analyze important modeling aspects, i.e., latent heterogeneity and endogeneity. Optimization methods are presented according to whether they refer to static or dynamic objectives. Based on these modeling aspects we evaluate the different studies. Considering various studies of model evaluation it becomes evident that logit models frequently constitute a good choice. However, Bayesian neural nets and Tobit models turn out to be good alternatives. As predictor effects are concerned results vary. Authors do not completely agree on which variables are the most important. Furthermore, signs and significances of predictors vary across studies. The majority of studies neglect latent heterogeneity and endogeneity. Finally, results show that there are still plenty of interesting research possibilities, such as a comprehensive evaluation of models or new specifications of (mailing) variables.